More than 700 tourism businesses took part in the survey which ran from 17th May to 8th June, with responses coming from all 32 of Scotland’s local authority areas and 15 core industry sub-sectors, predominantly self-catering, hotels, bars and restaurants, bed & breakfast, visitor attractions, guest houses and tour operators.

The survey found that 50% of businesses say they have fewer than normal bookings for the period of June-August in comparison to this time in May 2019.

Bookings this summer are perceived by businesses to have been impacted by the UK cost of living crisis, the appeal of outbound international travel, Scotland’s inability to compete internationally on price and value for money, and people taking late decisions on holiday destinations.

A total of 34% described their business as currently in steady recovery, 50% of respondents stated that it would take them at least a year to recover and 6% said they are unlikely to make it.

The top 3 challenges for businesses currently are rising energy costs, an increase in supplier costs, recruitment and staffing. Inflation is also a notable challenge.

More than 50% of businesses have seen a decrease in customer spending in comparison to the same period in May 2019.
The top three barriers to recruitment are the lack of available staff wanting to work, the current UK Immigration visa Policy, and a negative perception of the industry.

More than 700 tourism businesses took part in the survey which ran from 17th May to 8th June, with responses coming from all 32 of Scotland’s local authority areas and 15 core industry sub-sectors, predominantly self-catering, hotels, bars and restaurants, bed & breakfast, visitor attractions, guest houses and tour operators.

Discussing staffing and recruitment, 60% of hotels, 43% of visitor attractions and 45% of bars, pubs, restaurants, cafés and takeaways say they are unable to trade effectively with the level of staff they’re currently operating with.

The top three barriers to retention of staff are business seasonality, other sectors being perceived as being more attractive, and an inability for business to pay more competitively.

On recovery, more than 50% of businesses say it will take them at least 1 year for the financial recovery of their business, if at all. More than 30% of businesses are not confident or unsure how they feel about their long-term recovery and survival over the next 1-3 years. At the same time, over 60% of businesses have adapted, changing their business model to give them the best possible chance of commercial viability in the current business climate.

Marc Crothall, STA chief executive said: “The results of what has been one of our most robust surveys to date in terms of number of respondents and depth of data confirms very much what businesses have been telling us for many weeks now; recovery is happening albeit at a much slower pace than anticipated and certainly not across all tourism sectors.

“The cost-of-living crisis is hitting Scotland’s tourism sector very hard on many levels. People are hesitant about committing to booking a break due to household financial challenges and uncertainty, consumer spend is down and with the rise of energy prices and supplier costs, many businesses are finding that the level of recovery is almost static.

“This impacts the ability for our tourism industry to remain competitive globally; we struggle to compete on price and we’re unable to retain and attract the quality of staff required to deliver the level of service demanded by today’s consumers. The majority of our businesses cannot move beyond running to stand still, despite the fact that we’re now almost into the main tourist season. The transport disruption and planned rail strikes only make the challenge that much harder. The market is still fragile and businesses are finding it increasingly hard to trade their way into a place of sustainable recovery.”

He concluded: “The STA will continue to call on the UK government for a lowering of VAT and a change to UK Immigration rules which are deemed by the majority in our industry as the most effective policies to support businesses. We will also continue to push the Scottish Government to extend business rates relief beyond this month and commit to much greater investment in tourism promotion of Scotland as a destination.”